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The Coming Hard Rain

Most of your typical economic analysts have never lived through a really tough period of time. For the most part, excluding a couple of short recessions, they have only experienced the good times.

To them, a depression is outside their frame of reference. It has never happened in their lives, so it isn’t imaginable. It is the same for most people.

Yet there are a few voices from the Depression era still alive, and they are shouting a warning at the top of their lungs, hoping that someone, anyone, will listen.

In short: The recession is just starting, the stock market is set up for the biggest bear market crash ever, the government is going to be shocked when foreign lenders abandon it, and the dollar could devalue suddenly and catastrophically.

And in case you think these are the musings of old, cranky, disenchanted senior citizens overly worried about the government canceling their Social Security benefits, they happen to be among the most respected and even highest paid analysts today.

But will their warnings go unheeded?

“I saw it once, and I never want to see it again.” The 1930s were one of the toughest times in America’s history. It broke famous companies, it broke families, and it almost broke a nation. Economic analyst Richard Russell remembers those days, and he is afraid they are about to return

For Russell, following the Roaring Twenties life dramatically swung in the opposite direction. In 1929, the stock market crashed and his Uncle Irving jumped out of a 10-story midtown Manhattan hotel. One year later, everything had changed: Unemployment lines with tired men in patched clothing stretched around blocks and panhandlers clogged the curbs.

A decade later, the economy was still deteriorating—one step up, two steps down. Finally, in 1939, Russell recounts how his father lost his job and suffered a nervous breakdown. By that time, California had become a semi-police state. Sheriffs turned away travelers from entering towns out of fear that they would steal local jobs. Officials rounded up the homeless and shipped them to other parts of the country.

It took a world war to finally bring America out of the Great Depression.

Today, Richard Russell writes the Dow Theory Letters, an economic newsletter first published in 1958. The Dow Theory Letters is the oldest investing service continuously written by one person, and over his 52 years of work, he has never missed a single issue.

Recently, Russell told his readers that life is about to change in America—and not for the better. “Do your friends a favor,” he said. “Tell them to ‘batten down the hatches’ because there’s a hard rain coming. Tell them to get out of debt and sell anything they can sell (and don’t need) in order to get liquid. Tell them that … by the end of this year they won’t recognize the country” (Dow Theory Letters, May 20; emphasis mine throughout).

Won’t recognize the country?

Those are strong words. But if he was alone in his warnings they would be easier to dismiss.

Earlier this month, another Great Depression survivor made an equally startling statement. Analyst Harry Schultz, who claims to be one of the highest paid economic consultants, says that the economy has at least another seven years before it hits bottom and that he probably won’t live long enough to see the economy back at the level it was in 2007.

“We are poised at a heart-stopping moment in economic times,” he says. “On the one extreme side, the world is on the edge of massive deflation and depression. At the other extreme … hyperinflation. My view is: Both these extremes are possible. Certainly deflation is, on balance, in play today and gaining ground as money supply is actually declining! Hyperinflation seems impossible when there is not much inflation in most economies. But … hyperinflation is a monetary event, not an economic one, and will happen on an overnight basis, not via a general uptrend in inflation data.”

Deflation and hyperinflation? Dollar devaluation? Overnight?

Even former Federal Reserve Chairman Alan Greenspan, also a Great Depression survivor, is worrisome sounding of late. In a June 18 Wall Street Journal piece, Greenspan said that beneath the calm and ominous complacency are “market signals that do not bode well for the future.”

America’s inability to stem new deficit spending is placing the economy at grave risk. Interest rates could rise with “unexpected suddenness,” he warns. The “corrosive momentum of this fiscal crisis” should not be underestimated.

“Incremental change” cannot save America, he wrote. “The United States … is in need of a tectonic shift in fiscal policy.”

Russell, Schultz and Greenspan all personally know what a return of the Great Depression would mean. And it frightens them.

Thus they warn: The hard rain is coming. Get out of debt. The dollar could be destroyed overnight. Prepare for hyperinflation. Don’t be complacent. A Greater Depression is looming, and it will hit with unexpected suddenness. The result will be tectonic shifts.

Sound like something you might have read in the Trumpet or the old Plain Truth magazine?

If so, it is probably because of another man who not only survived the Great Depression, but went on to meet kings, queens, prime ministers, presidents, emperors and other heads of state. From the depths of poverty, he went on to found a worldwide work and publishing empire, three colleges, and humanitarian programs around the world.

That man was Herbert W. Armstrong, and for years he too warned that the world was on a collision course with economic Armageddon.

Back in 1984, he wrote that he could see how suddenly the world’s financial systems could collapse. “A massive banking crisis in America could suddenly result in triggering European nations to unite as a new world power,” he said.

For years he warned of dollar devaluation and inflation and that eventually, America would face “the most severe economic depression in history.”

At the time, people might have scoffed at those predictions, but here we are today and the world is openly discussing them. On Sunday, New York Times economist Paul Krugman said, “We are now, I fear, in the early stages of a third depression.” According to Krugman, many of America’s tens of millions of unemployed workers will go jobless for years—some of whom will never work again. The same day, the Telegraph’s Ambrose Evans-Pritchard practically pleaded with the Federal Reserve to sacrifice the dollar (purposefully devalue it) to try to stave off depression.

If people understood what these men know, they wouldn’t still be shopping at Gucci.

The main difference with the forecasts made by Herbert W. Armstrong is that he had the real answers for the problems confronting society. His solutions struck at the underlying fundamental reasons for America’s economic troubles and went beyond simplistic answers such as buying gold, looking to our Founding Fathers, or spending more stimulus money. His answers—because they were based on the Bible—offered not only hope, but actual solutions to society as a whole that if adopted would bring fundamental change to a world standing on the edge of the greatest depression yet.

The global economy may not have tipped into depression yet, but a hard rain—as in a flood—is coming. How long can you afford not to read Herbert W. Armstrong’s booklet The Wonderful World Tomorrow—What It Will Be Like? It is a booklet with the Bible’s answers. •